VF Corp., the apparel company that owns Lee and Wrangler jeans, agreed to buy Williamson-Dickie Manufacturing Co. for $820 million in cash, adding Dickies workwear to its stable of brands.
The deal, slated to be completed in the fourth quarter, should add 2 cents a share to earnings this year, VF said Monday. Philip Williamson, chief executive officer of closely held Williamson-Dickie, will remain with the company, which is based in Fort Worth, Texas.
The Dickies brand gives VF a new revenue source after two years of sputtering sales growth. The Greensboro, North Carolina-based company sees workwear as a key opportunity at a time when other categories have been slumping.
“When we introduced our 2021 global business strategy earlier this year, reshaping our portfolio to accelerate growth was our highest priority,” CEO Steve Rendle said in a statement. Buying Williamson-Dickie is a “meaningful step” toward that goal, he said.
VF, whose brand portfolio also includes Nautica sportswear, North Face outerwear and Vans shoes, raised its five-year financial targets Monday. It said revenue will increase 5 percent to 7 percent through 2021, up from a previous forecast of as much as 6 percent. Earnings per share will grow 11 percent to 13 percent, more than its earlier outlook for 10 percent to 12 percent.
Williamson-Dickie, which has been a family-owned business, will add more than $1 billion in revenue by then, VF said.
The shares gained as much as 3 percent to $63.43 Monday in New York. VF’s stock, which slid at least 14 percent in each of the past two years, has rebounded in 2017. It was up 15 percent this year through the end of last week.